NL-Tilburg, September 20th 2020
Export has been cooling down a bit and with that also the spot lot market that had gained ground in Europe over the last month. Here and there some higher prices for mixed paper and occ (kls) are still being paid but these are mainly mills with low stocks or new projects that are in the process of starting up. Next to the somewhat lower export prices that influence the market we gradually also see some more generation coming up. It is not difficult to explain the downturn in collections of recovered paper with the production figures of paper and board in the 2nd Quarter (in Cepi area down 8.4% compared to the 2nd Quarter of 2019) and the knowledge that we still have been struggling after the 2nd Quarter. The shrinkage of 8.4% is the composition of graphic paper as expected dramatically down by 28.7% whereas tissue (+3.2%) and packaging (+2.1%) still have been growing. The downturn in consumption of paper and board brings up the question whether this will be structural or that we will get back to ‘normal’ which means continued less production of printing and writing paper and with expansion in tissue and packaging only. The disappearance of decent structural growth has already hit our sector considerably and the ever ongoing consolidation of recovered paper processing plants seems to be insufficient to keep up the profitability in our sector. It is therefore no surprise that public companies are taking the lead in the restructuring of their recovered paper activities. Where some have even dropped the recovered paper activity completely, amongst them waste management companies that only recently preached the expansion possibilities in recycling of recovered paper, are others putting sites together to reduce costs or focus on running MRF’s only, which hardly can be described as recycling.
The world is changing and not as a result of corona only.
For the coming month recycled liner board producers have announced price increases for finished paper. It remains to be seen if this is a realistic move or that it is just an initiative to stop further price reductions. Pulp producers are preparing a similar move.
Hope and expectation is that China will absorb the new capacities in Europe. As new capacities are not only being built or planned in Europe but also in North America, Asia and even China itself, these expectations could be looked at with some skepticism. The actual price level of recycled liner board is self explanatory.
Price indications in Europe for low grades of recovered paper, sorted, baled and ex-works are now between € 50 and € 120 per ton. These prices are depending on quality, available volume, region and loaded weight.
Click here for the price chart, with prices of the last 10 years.
The price chart gives an indication of the price of mixed paper in the Netherlands free delivered mill over the last years. Scrolling over the top of the colums gives the exact price indication in Euro's per ton.
To view the price chart completely, please click and hold on the price chart after opening and move cursor to left or right to see all available years/months.